AstraZeneca Plc’s third-quarter profit fell less than analysts estimated and the company maintained its forecast for the year as a buyback program reduced shares outstanding.
Profit excluding restructuring costs and certain other items declined to $2.6 billion from $3.18 billion, the London-based company said today in a statement. On that basis, earnings per share fell to $1.51 from $1.71 a year earlier, beating the $1.45 a share average estimate of 20 analysts compiled by Bloomberg.
The U.K.’s second-biggest drugmaker has been scouting licensing deals and small to mid-sized acquisitions to bolster its pipeline amid development setbacks and patent expiries on its best-selling medicines. Pascal Soriot, chief executive officer since the start of this month, suspended the company’s share buyback program on his first day on the job as AstraZeneca reviews its strategy.
“The company’s financial performance in 2012 largely reflects the ongoing impact from the loss of exclusivity for several brands in key markets, as well as the challenges that confront the pharmaceutical industry as a whole,” Soriot said in the statement.
The drugmaker confirmed its forecast for profit excluding some items this year of $6 to $6.30 a share. The company raised its forecast Aug. 13 to reflect an agreement with Pfizer Inc. for rights to over-the-counter sales of Nexium which includes an upfront payment of $250 million.
Sales, which have been hurt by increased competition from generic medicines and government measures to reduce drug prices, fell 19 percent to $6.68 billion, compared with the $6.74 billion average estimate of 24 analysts surveyed by Bloomberg.
Drugs that account for more than 40 percent of sales will lose patent protection by the end of 2014. AstraZeneca’s second-best-selling drug, Seroquel for schizophrenia, lost U.S. patent protection in March, while the patent on Nexium for ulcers, the third-biggest seller, expires in the U.S. in 2014. The two generated $10.3 billion in sales last year.
Sales of Seroquel IR plunged 83 percent at constant exchange rates in the quarter to $169 million. Nexium, which already faces generic competition in Europe and Canada, fell 6 percent to $995 million and cancer treatment Arimidex dropped 22 percent to $130 million. Sales of its blockbuster cholesterol drug Crestor, which has faced increased competition from a copy of Pfizer Inc.’s Lipitor, were down 3 percent from a year ago at $1.54 billion.
Sales of blood-thinner Brilique, sold as Brilinta in the U.S., rose to $24 million during the quarter after the drugmaker made gains in Germany and the U.S.
AstraZeneca is undergoing its annual strategy review and will announce initial results when it reports 2012 earnings. The company also will provide a forecast for 2013 at that time.
The stock rose 0.4 percent to 2,896.5 pence at the close of trading in London. The stock has returned more than 3 percent including reinvested dividends so far this year, compared with a 15 percent return for the Bloomberg Europe Pharmaceutical Index.
It’s “still business as usual,” Elmar Kraus, an analyst with DZ Bank AG in Frankfurt, said in an interview. “We’re waiting to see what Pascal will do. The current operating performance should already be priced in.”
The purchase of Ardea Biosciences Inc. for $1.1 billion in April was the first acquisition greater than $1 billion since AstraZeneca paid $14.7 billion for MedImmune Inc. in 2007. The company has made a series of licensing deals and said July 1 it would pay Bristol-Myers Squibb Co. $3.4 billion to co-develop the diabetes drugs of Amylin Pharmaceuticals Inc., which Bristol is acquiring for $5.3 billion.
To cut costs, the company is looking to outsource some drug development. AstraZeneca said last week it signed a research deal with Beijing-based Pharmaron and a contract with Charles River Laboratories International Inc. for regulatory safety assessments of early stage experimental drugs.
The drugmaker has repurchased $2.3 billion of stock this year, compared with an initial target of $4.5 billion, the U.K. company reiterated today. The decision to stop repurchasing shares gives the drugmaker more flexibility to undertake a big acquisition, Brian Bourdot, an analyst at Barclays Plc’s investment-banking, has said.